Stock picks for 20 somethings

Want a few stock recommendations? Look no further.

Article Source: http://beta.fool.com/dillarda/2012/01/04/5-great-stocks-20-something-year-old/476/

5 Great Stocks for a 20-Something

Let’s face it, many college students who are leaving college are not finance or investment majors. Many had little to no exposure in personal finance or investing while in college. That is why when many of those individuals enter the workforce, and first look at their available options for a 401k, IRA or Roth IRA, it is like reading Chinese. Some may even completely forgo investing from their lack of understanding. However difficult it may be for a person with no investing exposure to put money into the stock market, it is completely essential.

When talking about this issue with several of my own friends, it usually boiled down to two things. First, invest in what you know, and second invest more now than later in life. Below are some stocks that almost every 20-something should be exposed to, and that I believe represents a good forward opportunity.

Target Corporation (NYSE: TGT)
As former college students move out of their college apartment or house, they find themselves desiring to furnish their new residence with something other than a futon, posters of their favorite sports team and milk crates for a TV stand. Target offers an upscale shopping experience while keeping prices low. Target’s private label and brand label product assortment allow new home owners and apartment dwellers to furnish their place with style while saving money.
Financially, Target is experiencing quarterly year over year revenue growth of almost 20%, and they provide a decent dividend for their stock holders. Since many 20-somethings have limited funds to invest, Target is also priced relatively low, currently at approximately $50 a share.

Best Buy (NYSE: BBY)
Many college freshmen first attend their university with a new laptop computer. After four, five, or even six years that computer is ancient and most likely broke in one way or another. Or, perhaps somebody also spilled beer on their TV during a party, and bottom corners forever remained a weird shade of pink. Regardless, when it is time for a 20 something to replace the electronics that faithfully got them through college, many think to go to Best Buy.
Financially, Best Buy is also a lower priced stock, approximately trading at $23 a share. Combined with a lower price to book and PEG ratio and enough cash in the bank to cover their debt, Best Buy should be poised maximize shareholder value.

Amazon (NASDAQ: AMZN)
Let’s face it; many 20 somethings have been exposed to computers and the internet for a majority of their lives. Many don’t know how to function without the internet or smart phones; when they need to know an answer to something, they simply “Google” it. That is why when it comes to online shopping, 20-somethings are no stranger. Gone are the days of bricks and mortar shopping only, and an increased focus is put on online shopping. A Pew Research study estimated that almost 3 out of 4 of all internet users in generation Y shop online. Amazon is the perfect avenue to capture this demographic, offering a wide variety of essential and nonessential products.
Financially, Amazon is a more expensive stock to purchase, trading at approximately $178 a share. With no debt, cash in the bank of over $6 billion, and revenue growth year over year at approximately 44%, Amazon should prove to increase their stock price.

Pandora (NYSE: P)
It‘s no secret that 20-somethings and Generation Y are good at multitasking. They need constant stimulation or else they can become bored. Pandora has provided an outlet for this need since creation. Many hours of Pandora radio stations has been played to college students studying for their upcoming finals. As those students transition to the work force, they may continue that trend of listening to Pandora while performing their job.
Financially, Pandora could look better. As Pandora continues to expand into the mobile phone market and as they strive to get their financial house in order, Pandora should trend in an upward direction. Also, with a price around $10 per share, investors can limit the amount of money at risk if they choose to invest in this stock.

Netflix (NASDAQ: NFLX)
The trials and tribulations of Netflix in 2011 have been well documented. Many subscribers ran away from their services, many also remained. As cable costs, HDTV receiver fees and DVR fee all add up to an increasingly large number, and the number of roommates plummets, many 20 somthings look to Netflix to provide them their dose of entertainment. As Netflix continues to expand to the mobile phone arena, Netflix is proving to be a cost saving alternative to cable or satellite for those fresh out of college.
Financially, Netflix has seen their stock price take a huge hit in 2011, down approximately 60% over the past year. However, this could provide an opportunity for the new investor. Currently, Netflix is trading at approximately $77 a share. Netflix has had positive revenue and earnings growth for the past year, enough cash in the bank to cover debt, and a PEG ratio of less than 1 indicates that NFLX could be poised to increase in value.